Redundancy in the ACT Government Public Service: Tax, Super and the Decision in Front of You

We’re Maciej Stanek and Imran Amjad, the financial advisers at Véurr Financial Planning. Over the past few weeks our phones have picked up a new theme: ACT Government staff asking what a voluntary redundancy would actually mean for them. This guide covers the questions ACTPS members are actually asking us — how the package and leave payout are taxed, what changes at 67, whether to take it, and what it means for your super.

ACT Government redundancies: where things stand (July 2026)

Last reviewed 21 July 2026.

On 28 May 2026, City and Environment Directorate director-general Dave Peffer announced a voluntary redundancy round targeting between 3 and 5 per cent of the directorate’s workforce — roughly 130 roles — to “manage current budget pressures”, run through an expression-of-interest process. His words matter for anyone feeling pressured: “Participation in the program is entirely voluntary. There’s no obligation for team members to apply or accept an offer” (The Canberra Times, 28 May 2026).

Behind it sits the 2026-27 ACT Budget: a restructure fund offering voluntary redundancy packages across the ACT public service — $35.4 million over four years for an expected net saving of $6.4 million. There is no service-wide program, quota or timetable: each director-general decides whether to use the fund or rely on natural attrition, against a backdrop of 30,224 budgeted full-time-equivalent staff and a new cap tying employment growth to ACT population growth (The Canberra Times). Rounds open directorate by directorate — if yours opens one, the framework below applies from the moment an offer lands.

How much redundancy pay do ACT public servants get?

Under the current ACTPS enterprise agreements, voluntary redundancy severance is the greater of 2 weeks’ pay per completed year of continuous service (capped at 48 weeks’ pay) or 26 weeks’ pay — plus notice of one month, or five weeks if you are over 45 with two years’ service, and up to one month to consider the offer.

Those provisions come from clause L6 of the ACTPS Administrative and Related Classifications Enterprise Agreement 2023-2026 — the redundancy provisions in the Technical and Support Services agreements are the same, but some ACTPS agreements are being renegotiated, so check the one covering your classification. The details worth knowing:

• The 26-week floor is unusually generous — the typical minimum under APS agency agreements is 4 weeks. Shorter-serving ACTPS officers can do much better than their federal counterparts.
• Your directorate must give you the figures — severance, pay in lieu of notice and paid-up leave credits — and cannot give notice of redundancy before your one-month consideration period ends. Ask for the figures in writing.
• There is a $1,000 contribution towards independent help. The agreements require the directorate to cover “independent, accredited financial counselling” for each officer offered a voluntary redundancy, up to $1,000. Ask your HR area exactly what it covers. If you would like a licensed adviser to look at your specific numbers, request a call back from Véurr here.
• Declining starts a different clock. An excess officer who declines enters a 7-month retention period; if redeployment hasn’t happened by the end, the fallback exit payment equals the voluntary redundancy amount less the salary received during retention — it shrinks over time. Involuntary redundancy requires union agreement.

How is tax calculated on my leave payout and the overall package?

An ACTPS redundancy package is taxed in three buckets. Genuine-redundancy severance is tax-free up to $13,598 plus $6,801 per completed year of service (2026-27). Any excess is an employment termination payment (ETP), taxed concessionally up to a cap. Unused annual and long service leave are taxed separately again — concessionally if the redundancy is genuine.

Bucket 1: the tax-free amount

For 2026-27 the tax-free limit is $13,598 plus $6,801 for each complete year of service (ATO genuine redundancy payment limits). Service compounds quickly: 18 complete years means $13,598 + (18 × $6,801) = $136,016 tax-free. Because ACTPS severance is capped at 48 weeks’ pay, long-serving officers’ severance frequently sits entirely inside the tax-free amount.

Bucket 2: the ETP layer

Any amount above the tax-free limit is an ETP, taxed at 17% if you have reached your preservation age, or 32% if you have not, up to the ETP cap of $270,000 for 2026-27; amounts above the cap attract the top marginal rate of 45% plus Medicare levy (ATO, how ETP components are taxed).

Bucket 3: unused annual leave and long service leave

Leave payouts are not part of the ETP. On a genuine redundancy, unused annual leave (and leave loading), and long service leave accrued after 15 August 1978, have tax withheld at a flat 32%. On an ordinary resignation or retirement, leave accrued after 17 August 1993 is instead taxed at your marginal rates (ATO Schedule 7). For a long-serving officer with months of accumulated leave, the redundancy’s classification changes the tax on the leave payout materially.

A scope note: Véurr are not tax agents — your directorate’s payroll area calculates the actual withholding. Our work sits on the other side of the calculation: planning what to do with the after-tax outcome.

What’s the difference between a “genuine redundancy” and any other redundancy?

A genuine redundancy, in tax law, is a payment made because your job is abolished and you are dismissed while under Age Pension age — currently 67. It unlocks the tax-free amount and the flat concessional rate on leave. At 67 or older on the day of dismissal, the same package gets neither.

The ATO’s definition has three working parts: the job is abolished, the employment is terminated, and the employee is under Age Pension age at dismissal (ATO, genuine redundancy payments; Age Pension age is 67 per Services Australia). Two points our callers keep raising:

• “But I volunteered — does that make it non-genuine?” Not by itself. The ATO’s ruling accepts that volunteering for a package can still amount to a dismissal, because the employer initiates the process and has the final say on whose employment ends (Taxation Ruling TR 2009/2). What matters is that the role is genuinely abolished. Your payroll area confirms how your specific payment is classified.
• “I’m 66 — what if the round runs past my birthday?” The test applies on the day of dismissal, not the day of the offer. Past 67 the package is still an ETP — generally taxed below ordinary income rates up to the $270,000 cap — but the tax-free amount disappears and leave moves to marginal rates. If that could be you, get the separation date confirmed in writing and take advice before anything is locked in.

That age line is the single most common question ACT public servants are asking us right now — and on a large package with a big leave balance, the difference is real money.

Should I take the redundancy or not?

There is no general answer — the offer is standard, but the finances around it never are. The decision turns on five things: how long the after-tax package must fund you; your re-employment timeline; what declining actually preserves; how close you are to super access at 60; and how close you are to 67, which changes the tax itself.

The considerations we walk clients through, without prescribing any of them:

• Cash-flow runway. Map the months between your last pay and your next reliable income. Centrelink waiting periods can apply after a payout — our redundancy guide explains the income maintenance and liquid assets waiting periods.
• What staying keeps. Salary, super contributions and leave accrual continue if you decline — but so does the uncertainty that prompted the round.
• The retention arithmetic. Declining as an excess officer starts the 7-month retention period, and the end-of-retention exit payment shrinks by the salary paid during it. Understand both paths before comparing them.
• Age and stage. The same 48-week package means something different at 45, at 59 with super access a year away, and at 66 with the genuine-redundancy age cap approaching.
• The household position. A partner’s income, the mortgage and dependants change how much runway you actually need.

Remember the program’s design: it is voluntary, with no obligation to apply or accept. The enterprise agreement itself says officers offered a redundancy should seek independent advice on their superannuation options and the tax rules applying to the payments — we agree, and the time to do it is before your window closes.

Will I be able to access my super — and is a pension or lump sum better?

The redundancy payout itself is paid to you as cash — it does not go into super. Your existing super stays preserved until you meet a condition of release: for most people, ceasing employment at 60 or over, or turning 65. A redundancy at 60-plus can open full access; under 60, super generally stays put.

The mechanics, per the ATO’s conditions of release: preservation age is 60 for anyone born after 30 June 1964, and “retirement” includes ceasing paid employment at age 60 or over; from 65, access is open whether or not you are working.

If access is open, the pension-versus-lump-sum question follows — and neither is “better” in general, because they do different jobs:

• An account-based pension keeps your money invested inside the concessional super environment and pays a regular income, subject to minimum annual drawdown rates (Moneysmart). It suits replacing a salary you are no longer earning.
• A lump sum gives immediate flexibility — clearing the mortgage is the classic use — but the money leaves super, and future earnings on it are taxed in your own name (Moneysmart).
• Most people can combine the two — a part lump sum with the balance as a pension. The right mix depends on your tax position, other income, Centrelink outcomes and age.

This is exactly the decision that warrants modelling with a licensed adviser before you commit — the trade-offs are personal, and some elections along the way cannot be reversed.

Still in CSS or PSS after 20-plus years? Your redundancy is a different decision

Most ACTPS staff are in accumulation super, but a long-serving minority are not: ACT Government employees could join the Commonwealth CSS until 1 July 1990 and PSS until 1 July 2005 (ACT Treasury). If that is you, you joined 20 to 35-plus years ago — and a redundancy puts scheme elections on the table that accumulation members never face.

For PSS members, CSC’s published redundancy rules include converting the entire benefit to a CPI-indexed pension at any age — with real traps: taking part of the benefit as a lump sum and preserving the rest removes the option of a PSS pension on the preserved balance later, and applications are due within 90 days of ceasing work (CSC — PSS redundancy options). CSS members have their own election windows and, in some circumstances, considerations tied to the 54-11 deferred benefit strategy. These elections are generally irreversible: get a benefit estimate from CSC, confirm your own options with them directly, and take specialist advice before you elect anything. Our guide to financial planning for public servants covers the schemes in detail.

Before you elect: five steps in order

1. Get the offer and your deadline in writing. The agreements give you up to one month to consider — confirm your exact dates.
2. Get your figures from the directorate. They must advise your severance, pay in lieu of notice and paid-up leave credits.
3. Check your super position. CSC benefit estimate if you are CSS or PSS; balance and condition-of-release check for everyone else.
4. Map your cash flow to the next income, allowing for Centrelink waiting periods.
5. Take licensed advice before you elect — inside the window, while both options are still open.

Frequently asked questions